Trade issues remained in focus after Beijing said negotiators had reached a “common understanding on resolving relevant problems”.
But stopped short of indicating an agreement was in the offing. The United States and China are close to agreement on the first phase of a trade deal. White House adviser Kellyanne Conway said Washington was getting “really close” to a deal.
However, the three of the biggest sticking points remain. In October, U.S. President said he expected to quickly dive into a second phase of talks once “phase one” had been completed. The second phase would focus on a key U.S. complaint that China effectively steals U.S. intellectual property.
Overall, currency trading is slowing before the U.S. Thanksgiving holiday, with traders increasingly pricing in tighter trading ranges for major currencies.
One-month euro/dollar implied volatility has fallen to 4.15/4.40%, the lowest in five years. Three-month volatility fell to a record low of 4.4/4.6%, suggesting traders do not see the main currency pair diverging from current levels.
The dollar/yen’s three-month volatility stood at 4.775/5.025%, the lowest since late April and near its historical lows above 4%. Three-month volatility on the Australian dollar dropped to a five-year low of 6.12/6.42%.
START TRADINGForex – Trade issues remain under the spotlight
The next deadline for market participants to watch is Dec. 15. That is when the U.S. threatened to impose 15% tariffs on $160 billion of imports from China.
The US dollar gave up earlier gains as some of the optimism over a U.S.-China trade agreement faded on Tuesday.
The U.S. currency had jumped to a two-week high against the safe-haven Japanese yen in Asian trading. The dollar was last trading neutral at 108.98 yen, after rising as high as 109.205, its highest since Nov. 12.
The euro held steady versus the dollar even though the mood among German consumers rose unexpectedly. The currency was also flat versus the dollar at $1.1017, not far from the 11-day low of $1.1004 it reached on Monday.
The pound fell on Tuesday after a second poll showed the Conservative Party’s lead is narrowing before the British election. Hopes that a Johnson victory would end more than three years of uncertainty over Brexit have lifted the pound.
Sterling slipped 0.2% to $1.2876 in early European trading on Tuesday, after rising as high as $1.2913 on Monday. Against the euro, the pound was down 0.2% at 85.555 pence, off Monday’s one-week high of 85.30.
The oil prices rose on Tuesday on hopes of progress toward a US – China trade agreement, the world’s biggest oil users. Brent crude, the international price benchmark, gained 14 cents to $63.79 by 1144 GMT. WTI crude was up 17 cents at $58.18.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money